Beko Australia and New Zealand, a subsidiary of global household appliances company, Arçelik, has been appointed the distributor of Hitachi branded home appliances in Australia.
Beko ANZ liaises with Arçelik Hitachi Home Appliances, a joint venture between Arçelik and Hitachi Global Life Solutions – established in July 2021 – to manufacture, sell and provide after-sales services of Hitachi branded home appliances globally (except Japan).
Appliance Retailer sat down with Beko ANZ managing director, John Brown and Hitachi executive general manager, Gaurav Sethi, to discuss the joint venture and what it means for the brands’ retail partners.
The joint venture (JV) was negotiated between Hitachi Japan and Arçelik Turkey. Arçelik aspired to grow globally – specifically in the Asia Pacific region, according to Brown.
“Building a consumer durables brand from scratch, particularly in mature markets, is hard work and very expensive. The opportunity to leverage such a powerful brand in this region with a group wholly focused on the appliance business made a lot of sense. Hence, it’s a joint venture and not an acquisition or takeover,” he said.
“The Australian arm – and eventually New Zealand – of the venture has been approached in a similar fashion to bring the two brands together. From Beko’s perspective, we’re also 100% focused on appliances. We understand and respect the Hitachi brand, which is more well-known in Australia because of its heritage not only in appliances, but in other business areas.”
At a global level, the joint venture provides an opportunity for the Hitachi brand to get the necessary focus it deserves in the appliance space, according to Sethi.
“Having a business entity predominantly focused on appliances gives it the focus it needs, especially around sustainability and energy efficiency, as well as forward looking technology. I’d like to iterate, it’s not simply appointing Beko as the distributor. Beko is a partner of the joint venture between Hitachi Japan and Arçelik Turkey. It’s not a third party being appointed; it’s two group companies coming together and finding synergies,” he said.
Hitachi’s focus has been on refrigeration with a limited distribution model through Bing Lee and Harvey Norman, while Beko’s focus is on cooking and laundry with additional national distribution partners.
“From a synergy point of view, the product range and distribution are complementary. Arçelik has a larger backend in terms of sourcing products and components, as well as a greater focus on sustainability and innovation,” Sathi said.
“Hitachi is looking to expand into laundry with front load washing machines and heat pump dryers, as well as dishwashers under the Hitachi brand. There are also discussions around small appliances. Our brand positioning has always been in the mid to premium segment, so we want to ensure the products support that. Arçelik is conscious of preserving Hitachi’s Japanese heritage, which is why it’s a joint venture in the truest sense.”
Brown said given Hitachi is a premium brand, products need to have a generational plan with technologies brought in ahead of the mass market.
“As a joint venture, it’s a merger of cultures and we understand the importance of sustaining the identity of each brand. It’s about bringing Hitachi’s heritage and history into a more modern customer centric sense. Hitachi has historically been engineering and technology focused, so we want to humanise it,” he said.
The distribution strategy for Hitachi will be retained in Bing Lee, Harvey Norman and a few small specialist stores.
“Our approach for growing the Hitachi brand is broadening categories including laundry and small appliances, while strengthening its offering in the refrigeration category,” Brown said.
Sathi reiterated that there’s no plans to open distribution or sign new partners. “There’s a lot of headroom in the current distribution, both from a distribution expansion point of view and product range enhancement, and that’s where the focus will be. It’s important to note that Hitachi is still in its infancy in Australia, given our 10-year hiatus from the appliance category, so we are focused on further building our brand affinity.”
Message to retail partners
“Our intention – both mine and John’s – has been clear from the beginning that we will come together as two group companies but ensure our people are looked after first and foremost – our employees and our customers,” Sathi said.
“I’m confident that our retail partners would vouch for us because we have been taking them along the journey, telling them what’s going to happen and how it’s going to be done. As a result, it’s been the smoothest and cleanest distribution they would have experienced. We gave ourselves enough time to ensure it was a smooth transition for ordering and receiving product, as well as training and ensuring people had access to the right systems.
“We would also like to give credit to our people – both the Hitachi and Beko team – because there is a human side to this transition. There were concerns about what would happen next and what it would mean for their job given a duplication of roles. Internal and external communication has been key. I’m proud of the way it’s been carried out – our people are still here and our customers are still buying,” he added.
“We always wanted to execute this transition as transparently as possible and we believe that’s been the reality. Our retail partners are dealing with the same people and that will continue, and there is a positive and growing product generation plan,” Brown said.
“For a long time, Beko has wanted a sales office based in Sydney. We are currently operating out of the Hitachi office in North Ryde. In Victoria, we have a team of four sales representatives, and in New South Wales, a larger team of 14, so we intend on having a Sydney-based sales office. It will also bring us closer to key customers including Bing Lee, Harvey Norman and Narta.”